WORK by US analyst John D McCown shows container lines recorded a net profit of US$5.4 billion in the first quarter of 2024, a massive turnaround from 3Q 2023 and seven previous quarters of downward movement.
The upturn was desperately needed, as Mr McCown calculated the actual Q1 results took the 12-month running net income to $16.4 billion, a $154.7 billion or 90.4% decrease on the equivalent period to end March 2023.
In individual comparisons to last year seven of the eleven companies had lower net income while four had higher net income, the analyst found. However, all eleven carriers had decreases in comparisons of the last twelve months to the prior period with negative variances in these comparisons all being greater than $3 billion.
While carriers reporting Q1 figures have been cautiously optimistic about the rest of 2024, some analysts are now suggesting the recovery in rates and utilisation has been mostly driven by the Red Sea situation and while diversions look likely to continue indefinitely, the consequences of disruptions are ‘normalising’ on the revenue side but rising on the costs front.
In its Q1 Schedule Reliability Scorecard marine database compiler eeSea pinpointed November 2023, after Red Sea diversions began, as the start of an industry-wide decline in container lines’ schedule-keeping.
“Berth stays have increased, and on-time performance has fallen from an average 35% in 2023 to 27% in 2024. All negative indicators share November 2023 as the pivotal downturn period,” eeSea found.
“Volumes do remain stable, but reliability has continued to drop in Q1, in opposition to the trend of the improved schedule reliability we saw in Q1 23 – we expect this decline to continue through Q2 24.”
Maersk remains the best performer but still inly registered 36% on-time performance.
The manifestation of this trend is seen in a number of key ports, principally in Asia and Europe. Singapore is currently trying to clear a backlog of over 200,000 containers and the port authority has indicated it doesn’t anticipate getting on top of the situation until year’s end. eeSea rated Singapore 64th in terms of best-performing ports, while Shanghai was 26th.
Carriers in Australian trades are reporting waits of several days to get booked berths in the ports, which is already having a knock-on effect on local schedules.
